In today’s world of constant news alerts, social media commentary, and workplace discussions about “the next big investment,” it can be difficult to tune out the noise. A headline about tariffs, a market sell-off on the evening news, or a colleague claiming they found the next winning stock can all create the impression that successful investing requires constant reaction.
In reality, the opposite is usually true. Investment decisions driven by emotion, headlines, or casual conversations often lead to poor outcomes. Long-term financial success rarely comes from guessing the next market move; it comes from focusing on the factors you can actually control.
The danger of reacting to headlines
A recent example illustrates how misleading headlines can be. In early 2025, markets were dominated by news surrounding escalating tariffs between Canada and the United States. Trade tensions led to widespread concern that Canadian industries, from manufacturing to natural resources, could face significant economic headwinds. The uncertainty triggered market volatility and raised fears of slowing economic growth.
For many investors, the instinct was to reduce exposure to Canadian equities. The narrative seemed clear: tariffs would damage Canadian companies, so avoiding the Canadian market appeared logical.
However, markets rarely follow simple narratives. Despite economic uncertainty and negative headlines, Canadian equities performed far better than many expected. By the end of 2025, Canadian stocks had significantly outperformed their U.S. counterparts, with the Morningstar Canada Index gaining more than 32% compared with roughly 17% for the US market.
Investors who made emotional decisions based on headlines may have exited the market just before the strongest returns arrived.
This is a recurring pattern in financial markets. News cycles tend to focus on the most dramatic stories — recessions, geopolitical tensions, political developments, or interest rate changes. But markets incorporate enormous amounts of information quickly, and outcomes often diverge from the narratives dominating the headlines.
Source: Morningstar Canada GR CAD MSCACADG, Portfolio Key P000001035
The watercooler effect
Investment decisions can also be influenced by conversations with friends, family members, or coworkers. Someone at the office might talk about a stock that “everyone is buying,” a cryptocurrency that has doubled in value, or a sector that appears unstoppable.
While these conversations are common, they rarely represent a sound investment process.
By the time an investment idea becomes a popular topic of conversation, much of the opportunity has often already been priced into the market. Acting on these tips can result in chasing performance rather than building a disciplined investment strategy.
The challenge is that human psychology naturally gravitates toward stories and excitement. It is much easier to become enthusiastic about a trending investment than to quietly follow a long-term financial plan.
Timing the market is extremely difficult
Trying to predict where markets will move next — commonly referred to as “timing the market” — is one of the most common mistakes investors make.
Successful market timing requires getting two decisions correct: when to exit the market and when to re-enter. Even professional investors with access to extensive research and data struggle to consistently achieve this.
Missing just a handful of the strongest days in the market can dramatically reduce long-term returns. For most investors, a disciplined and diversified approach produces far better outcomes than attempting to anticipate short-term movements.
Focus on what you can control
Rather than reacting to news cycles or speculation, investors should focus on the factors that are within their control.
1. Minimizing unnecessary expenses
One often overlooked factor in financial planning is spending habits. In recent years, subscription services have become increasingly common. Streaming platforms, software subscriptions, fitness apps, and premium digital services are frequently set up with automatic monthly billing.
Individually, many of these services cost only $10–$20 per month. However, multiple subscriptions can quietly add up to hundreds of dollars each month, often for services that are rarely used.
For example, five subscriptions averaging $15 per month cost $75 monthly, or $900 annually. If that same $900 were invested each year and earned an average return of 6%, it could grow to more than $70,000 over 30 years. Small expenses can quietly erode the power of long-term compounding.
2. Minimizing taxes
Tax efficiency is another powerful lever that investors can control.
In Canada, registered accounts such as the First Home Savings Account (FHSA) and Registered Retirement Savings Plan (RRSP) allow investors to reduce taxable income and grow investments on a tax-deferred or tax-free basis. Consistently contributing to these accounts can significantly improve long-term wealth accumulation compared to investing in taxable accounts alone.
While tax planning may not be as exciting as chasing market trends, it can have a meaningful impact on net returns.
3. Aligning investments with your risk tolerance
A well-structured portfolio should reflect an investor’s time horizon, financial goals, and tolerance for market volatility.
When portfolios are built without considering these factors, investors are more likely to make emotional decisions during periods of market stress. Conversely, when a portfolio aligns with an investor’s risk profile, it becomes much easier to stay disciplined during volatile periods.
Diversification across asset classes, geographic regions, and sectors can also help reduce the impact of unexpected events.
An advisor’s input
One of the most valuable roles a financial advisor can play is helping investors filter through the constant stream of financial news and commentary.
Markets will always experience periods of uncertainty. Headlines will continue to predict recessions, bubbles, and market crashes. Conversations with friends and colleagues will continue to revolve around “hot” investments.
A disciplined investment strategy does not require reacting to each of these signals.
The long-term perspective
Financial success is rarely about finding the perfect stock or predicting the next economic event. It is about consistently applying sound financial principles over long periods of time.
The headlines will change. Market narratives will shift. And the next investment trend will inevitably capture attention.
But investors who remain focused on what they can control are far more likely to achieve lasting financial success.
Disclaimer:
Gabriel Zitoli is a Financial Advisor with CI Assante Wealth Management Ltd. The opinions expressed are those of the author and not necessarily those of CI Assante Wealth Management Ltd. Please visit www.tmfg.ca to discuss your circumstances prior to acting on the information above. CI Assante Wealth Management Ltd. is a Member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization.
